Russia, China deepen energy ties

• 9 years ago (2014-11-10)
• Junior Isles

Asia 850 Europe 1061

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China and Russia deepened their energy ties with a second major deal that further reduces Russia’s reliance on Europe as its main gas off-taker. The preliminary gas-supply agreement signed in Beijing by Russian President Vladimir Putin and Chinese President Xi Jinping, would also secure 17 per cent of the gas supplies China needs by the end of the decade.

The deal, not quite as big as the $400 billion pact signed earlier this year, would see Russian oil firm OAO Gazprom supply of as much as 30 billion cubic metres of gas annually from developments in West Siberia to China over 30 years.

Another Russian producer, OAO Rosneft, also agreed to sell a 10 per cent stake in a Siberian unit to state-owned China National Petroleum Corp.

The export of new supplies to Asia increases the possibility of a glut on global energy markets by early next decade. Once deliveries begin, China would replace Germany as Russia’s biggest gas market.

Russia may start selling gas to China within four to six years as part of its agreement with CNPC, Alexey Miller, the chief executive officer of Gazprom, told reporters in Beijing.